LV Times columnist: Avoiding the long-term care time bomb

One of the most devastating events that can occur in a family is when one or more members require long-term care. Financially, it can wipe out a family’s savings within a few years.

It can also tear a family apart due to the emotional and physical stress caused by providing care to a family member. In most cases, it involves care for a remaining elderly parent who has fallen, become ill or has dementia. A more challenging scenario is when both parents live at home and one spouse is providing care for the other. Suddenly, the spouse providing care falls or becomes ill and now they both require care. The family has an immediate crisis. In most cases, they are not sure where to turn.

What happens next? The family will have a meeting and discuss options. Mom and/or Dad will likely want to remain at home. Some of the siblings may want them to go into a nursing home or assisted living facility. If Mom and/or Dad are forced into a nursing home or assisted living against their wishes, it may have an adverse affect on their mental and physical health because they have just lost their ability to make choices and control their own life.

Financial issues are always a major factor. A nursing home can cost from $60,000-$80,000 per year per person, depending on the amenities, according to the 2012 MetLife market survey for the Kansas City area. Assisted living would cost less.

Medicare won’t pay the bill. It only provides limited in-home visits and the need is reevaluated every 60 days. Medicaid does provide funding for nursing home and home care services, but you have to be broke to qualify. Additionally, not all facilities take Medicaid or they only take a limited number of Medicaid residents. A number of Medicaid programs for the elderly are administered for the state by managed care organizations, like KanCare. Typically, they will recommend a limit on home care services. If your needs exceed that limit, they may recommend that Medicaid only fund nursing home services. Long-term care insurance is the only insurance that is designed to pay for these types of costs. Without it, a family must pay for it out-of-pocket. I have written previous articles on the real cost of trying to do this.

So, let’s assume Mom and Dad want to stay home and the family honors their wishes. Typically, finances are a constraining factor, so in many cases the family will initially try to provide most of the care themselves. Unfortunately, because families are scattered across the country, most of the care will fall on the shoulders of the one sibling that lives closest. In many cases, the strain on the care giver over time caused by providing continuous care can have an adverse impact on the mental and physical health of the primary caregiver. This, in turn, can create significant friction within the family between those who do not provide care and those who do. This will flare up every time the siblings that live far away drop in for a visit. Assuming that mom and/or dad still have their faculties, they will pick up on this family tension and it will have a negative effect on them.

What’s the probability of this happening? It’s very likely unless Mom and Dad have a plan. I think about 60 percent of us will, at some point in our lives, require some form of long-term care. That could be home care, assisted living and/or nursing home care. For a married couple in their late 60s, it’s almost certain that at least one spouse will require some form of long-term care.

Unfortunately, most of us have no plan. By the time we start to think about long-term care, it’s too expensive to buy long-term care insurance. So, we do nothing. However, there are things we can do to avoid putting it all on the family’s shoulders. In my next article, I will talk about how to plan to defuse the long-term care time bomb.

Larry Martin is an Investment Advisor Representative offering advisory services through Mader & Shannon Wealth Management, Inc. He can be reached at larrymartin@theretirementexperts.us or (913) 651-4321.

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